La Jolla Pharmaceutical Company (Nasdaq: LJPC), which is dedicated to the development and commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases, today announced financial results for the three and twelve months ended December 31, 2021 and highlighted corporate progress.
Corporate Progress
- Exclusive Licensing Agreement for GIAPREZA™ (Angiotensin II) and XERAVA™ (Eravacycline) in Europe: In January 2021, La Jolla Pharmaceutical Company announced that it and certain of its wholly owned subsidiaries (collectively, La Jolla) entered into an exclusive licensing agreement with PAION AG and its wholly owned subsidiary (collectively, PAION) to commercialize GIAPREZA and XERAVA in the European Economic Area, the United Kingdom and Switzerland (the Territories). Under the terms of the exclusive licensing agreement, La Jolla is entitled to receive: (i) an upfront cash payment of $22.5 million; (ii) potential commercial milestone payments of up to $109.5 million; and (iii) double-digit tiered royalty payments based on net sales of GIAPREZA and XERAVA.
- Acquisition of Tetraphase Pharmaceuticals, Inc. (Tetraphase): In July 2020, La Jolla completed its acquisition of Tetraphase, a biopharmaceutical company focused on commercializing its novel tetracycline, XERAVA, to treat serious and life-threatening infections. Financial results for periods ending December 31, 2020 and beyond include Tetraphase’s financial results subsequent to the acquisition closing date of July 28, 2020.
- Net Sales: For the three and twelve months ended December 31, 2020, net sales were $11.0 million and $33.4 million, respectively, compared to $7.3 million and $23.1 million, respectively, for the same periods in 2019.
- GIAPREZA Net Sales: For the three and twelve months ended December 31, 2020, GIAPREZA U.S. net sales were $8.7 million and $29.3 million, respectively, up 19% and 27%, respectively, from the same periods in 2019.
- XERAVA Net Sales: Subsequent to July 28, 2020 and through December 31, 2020, XERAVA U.S. net sales were $4.2 million. For the three and twelve months ended December 31, 2020, including the period prior to the acquisition of Tetraphase, XERAVA U.S. net sales were $2.3 million and $8.2 million, respectively, up 53% and 128%, respectively, from the same periods in 2019.
- GIAPREZA Net Sales: For the three and twelve months ended December 31, 2020, GIAPREZA U.S. net sales were $8.7 million and $29.3 million, respectively, up 19% and 27%, respectively, from the same periods in 2019.
“2020 was a productive year for La Jolla as we completed the integration of Tetraphase, increased net sales of both products compared to the prior year and reduced our operating costs,” said Larry Edwards, President and Chief Executive Officer of La Jolla. “Our agreement with PAION positions us well to serve the needs of patients suffering from life-threatening diseases in both the U.S. and Europe. As we enter 2021, our focus will be on continuing to grow net sales of both GIAPREZA and XERAVA while continuing to manage operating costs.”
Financial Results
For the three and twelve months ended December 31, 2020, net sales were $11.0 million and $33.4 million, respectively, compared to $7.3 million and $23.1 million, respectively, for the same periods in 2019.
La Jolla’s net loss for the three and twelve months ended December 31, 2020 was $3.5 million and $39.4 million, or $0.13 and $1.44 per share, respectively, compared to $25.2 million and $116.5 million, or $0.93 per share and $4.30 per share, respectively, for the same periods in 2019.
As of December 31, 2020, La Jolla had $21.2 million of cash and cash equivalents. On a pro forma basis, adjusting for $18.9 million of upfront net proceeds from its licensing agreement with PAION, net of the amounts due under the George Washington University and Harvard University license agreements, La Jolla had cash and cash equivalents of $40.1 million.
Net cash used for operating activities for the three and twelve months ended December 31, 2020 was $7.3 million and $37.6 million, respectively, down 57% and 56%, respectively, from the same periods in 2019. Net cash used for operating activities for the three and twelve months ended December 31, 2020, excluding cash expenditures related to reductions in headcount and transaction costs associated with the Tetraphase acquisition, was $5.7 million and $27.2 million, respectively, down 65% and 67%, respectively, from the same periods in 2019. Cash expenditures related to reductions in headcount were $1.6 million and $9.5 million for the three and twelve months ended December 31, 2020, respectively, and $0.9 million and $3.2 million, respectively, for the same periods in 2019. Cash expenditures related to transaction costs associated with the Tetraphase acquisition were zero and $0.9 million for the three and twelve months ended December 31, 2020, respectively.
About GIAPREZA
GIAPREZA™ (angiotensin II) injection is approved by the U.S. Food and Drug Administration (FDA) as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock. GIAPREZA is approved by the European Commission (EC) for the treatment of refractory hypotension in adults with septic or other distributive shock who remain hypotensive despite adequate volume restitution and application of catecholamines and other available vasopressor therapies. GIAPREZA mimics the body’s endogenous angiotensin II peptide, which is central to the renin-angiotensin-aldosterone system, which in turn regulates blood pressure. Prescribing information for GIAPREZA is available at http://www.giapreza.com. The European Summary of Product Characteristics is available on the EMA website: www.ema.europa.eu/en/medicines/human/EPAR/giapreza. GIAPREZA is marketed in the U.S. by La Jolla Pharmaceutical Company on behalf of La Jolla Pharma, LLC, its wholly owned subsidiary, and will be marketed in Europe by PAION AG on behalf of La Jolla Pharma, LLC.
GIAPREZA Important Safety Information
Contraindications
None.
Warnings and Precautions
There is a potential for venous and arterial thrombotic and thromboembolic events in patients who receive GIAPREZA. Use concurrent venous thromboembolism (VTE) prophylaxis.
Adverse Reactions
The most common adverse reactions that were reported in greater than 10% of GIAPREZA-treated patients were thromboembolic events.
Drug Interactions
Angiotensin converting enzyme (ACE) inhibitors may increase response to GIAPREZA. Angiotensin II receptor blockers (ARBs) may reduce response to GIAPREZA.
You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800-FDA-1088.
For additional information, please see Full Prescribing Information for the United States and the Summary of Product Characteristics for the European Union.
About XERAVA
XERAVA™ (eravacycline) for injection is approved by the U.S. Food and Drug Administration (FDA) as a tetracycline class antibacterial indicated for the treatment of complicated intra-abdominal infections (cIAI) in patients 18 years of age and older. XERAVA is approved by the European Commission (EC) for the treatment of cIAI in adults. Prescribing information for XERAVA is available at www.xerava.com. XERAVA is marketed in the U.S. by Tetraphase Pharmaceuticals, Inc., a wholly owned subsidiary of La Jolla, and will be marketed in Europe by PAION AG on behalf of Tetraphase Pharmaceuticals, Inc.
XERAVA Important Safety Information
XERAVA is a tetracycline class antibacterial indicated for the treatment of complicated intra-abdominal infections in patients 18 years of age and older.
XERAVA is not indicated for the treatment of complicated urinary tract infections.
To reduce the development of drug-resistant bacteria and maintain the effectiveness of XERAVA and other antibacterial drugs, XERAVA should be used only to treat or prevent infections that are proven or strongly suspected to be caused by susceptible bacteria.
XERAVA is contraindicated for use in patients with known hypersensitivity to eravacycline, tetracycline-class antibacterial drugs or to any of the excipients. Life-threatening hypersensitivity (anaphylactic) reactions have been reported with XERAVA.
The use of XERAVA during tooth development (last half of pregnancy, infancy and childhood to the age of eight years) may cause permanent discoloration of the teeth (yellow-gray-brown) and enamel hypoplasia.
The use of XERAVA during the second and third trimester of pregnancy, infancy and childhood up to the age of eight years may cause reversible inhibition of bone growth.
Clostridium difficile associated diarrhea (CDAD) has been reported with use of nearly all antibacterial agents and may range in severity from mild diarrhea to fatal colitis.
The most common adverse reactions observed in clinical trials (incidence ≥ 3%) were infusion site reactions, nausea and vomiting.
XERAVA is structurally similar to tetracycline-class antibacterial drugs and may have similar adverse reactions. Adverse reactions including photosensitivity, pseudotumor cerebri and anti-anabolic action, which has led to increased blood urea nitrogen, azotemia, acidosis, hyperphosphatemia, pancreatitis and abnormal liver function tests, have been reported for other tetracycline-class antibacterial drugs, and may occur with XERAVA. Discontinue XERAVA if any of these adverse reactions are suspected.
You are encouraged to report negative side effects of prescription drugs to the FDA. Visit www.fda.gov/medwatch or call 1-800-FDA-1088.
For additional information, please see Full Prescribing Information for the United States.
About La Jolla Pharmaceutical Company
La Jolla Pharmaceutical Company is dedicated to the development and commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases. GIAPREZA™ (angiotensin II) is approved by the U.S. FDA as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock. XERAVA™ (eravacycline) is approved by the U.S. FDA for the treatment of complicated intra-abdominal infections. For more information, please visit www.ljpc.com.
Forward-looking Statements
This press release contains “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. We caution investors that forward-looking statements are based on management’s expectations and assumptions as of the date of this press release and involve substantial risks and uncertainties that could cause the actual outcomes to differ materially from what we currently expect. These risks and uncertainties include, but are not limited to, those associated with: GIAPREZA™ (angiotensin II) and XERAVA™ (eravacycline) sales; whether La Jolla will realize the benefits from the acquisition of Tetraphase Pharmaceuticals, Inc.; regulatory actions relating to La Jolla’s products by the U.S. FDA, European Commission and/or other regulatory authorities; expected future cash flows of La Jolla, including milestone and/or royalty payments resulting from La Jolla’s exclusive license agreement with PAION AG; and other risks and uncertainties identified in our filings with the U.S. Securities and Exchange Commission. Forward-looking statements in this press release apply only as of the date made, and we undertake no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances.
LA JOLLA PHARMACEUTICAL COMPANY Condensed Consolidated Balance Sheets (in thousands, except par value and share amounts) | ||||||||
December 31, | December 31, | |||||||
2020 | 2019 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 21,221 | $ | 87,820 | ||||
Accounts receivable, net | 5,834 | 2,960 | ||||||
Inventory, net | 6,013 | 2,211 | ||||||
Prepaid expenses and other current assets | 3,388 | 4,467 | ||||||
Total current assets | 36,456 | 97,458 | ||||||
Goodwill | 20,123 | - | ||||||
Intangible assets, net | 14,873 | - | ||||||
Right-of-use lease assets | 536 | 15,491 | ||||||
Property and equipment, net | 215 | 18,389 | ||||||
Restricted cash | 40 | 909 | ||||||
Total assets | $ | 72,243 | $ | 132,247 | ||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,762 | $ | 4,177 | ||||
Accrued expenses | 6,494 | 9,312 | ||||||
Accrued payroll and related expenses | 2,878 | 8,332 | ||||||
Lease liabilities, current portion | 204 | 2,766 | ||||||
Total current liabilities | 12,338 | 24,587 | ||||||
Deferred royalty obligation, net | 124,437 | 124,379 | ||||||
Accrued interest expense on deferred royalty obligation, less current portion | 19,111 | 12,790 | ||||||
Lease liabilities, less current portion | 332 | 26,481 | ||||||
Other noncurrent liabilities | 4,112 | - | ||||||
Total liabilities | $ | 160,330 | $ | 188,237 | ||||
Commitments and contingencies (Note 6) | ||||||||
Shareholders’ deficit: | ||||||||
Common Stock, $0.0001 par value; 100,000,000 shares authorized, 27,402,648 and 27,195,469 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | 3 | 3 | ||||||
Series C-12 Convertible Preferred Stock, $0.0001 par value; 11,000 shares authorized, 3,906 shares issued and outstanding at December 31, 2020 and December 31, 2019; and liquidation preference of $3,906 at December 31, 2020 and December 31, 2019 | 3,906 | 3,906 | ||||||
Additional paid-in capital | 984,756 | 977,432 | ||||||
Accumulated deficit | (1,076,752 | ) | (1,037,331 | ) | ||||
Total shareholders’ deficit | (88,087 | ) | (55,990 | ) | ||||
Total liabilities and shareholders’ deficit | $ | 72,243 | $ | 132,247 | ||||
LA JOLLA PHARMACEUTICAL COMPANY Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | ||||||||
Year Ended | ||||||||
December 31, | ||||||||
2020 | 2019 | |||||||
Revenue | ||||||||
Net product sales | $ | 33,419 | $ | 23,054 | ||||
Total revenue | 33,419 | 23,054 | ||||||
Operating expenses | ||||||||
Cost of product sales | 7,819 | 2,392 | ||||||
Selling, general and administrative | 38,428 | 45,134 | ||||||
Research and development | 23,010 | 85,329 | ||||||
Total operating expenses | 69,257 | 132,855 | ||||||
Loss from operations | (35,838 | ) | (109,801 | ) | ||||
Other income (expense) | ||||||||
Interest expense | (10,051 | ) | (10,774 | ) | ||||
Interest income | 235 | 2,128 | ||||||
Other income—related party | 6,279 | 1,939 | ||||||
Other income (expense) | (46 | ) | - | |||||
Total other income (expense), net | (3,583 | ) | (6,707 | ) | ||||
Net loss | $ | (39,421 | ) | $ | (116,508 | ) | ||
Net loss per share, basic and diluted | $ | (1.44 | ) | $ | (4.30 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 27,329 | 27,112 | ||||||
LA JOLLA PHARMACEUTICAL COMPANY Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands) | ||||||||
Year Ended | ||||||||
December 31, | ||||||||
2020 | 2019 | |||||||
Operating activities | ||||||||
Net loss | $ | (39,421 | ) | $ | (116,508 | ) | ||
Adjustments to reconcile net loss to net cash used for operating activities: | ||||||||
Share-based compensation expense | 6,207 | 23,733 | ||||||
Depreciation expense | 2,188 | 4,552 | ||||||
Non-cash interest expense | 6,379 | 8,775 | ||||||
Inventory fair value step-up adjustment included in cost of product sales | 2,458 | - | ||||||
Amortization of intangible assets | 647 | - | ||||||
Change in fair value of contingent value rights | (800 | ) | - | |||||
Amortization of right-of-use lease assets | 1,249 | 1,307 | ||||||
Loss on short-term investments | 502 | - | ||||||
Loss on disposal of property and equipment, net of gain on lease termination | 10 | 24 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | (1,687 | ) | (1,579 | ) | ||||
Inventory, net | (1,493 | ) | (191 | ) | ||||
Prepaid expenses and other current assets | 2,297 | 644 | ||||||
Accounts payable | (2,815 | ) | (4,395 | ) | ||||
Accrued expenses | (5,781 | ) | 395 | |||||
Accrued payroll and related expenses | (5,454 | ) | 823 | |||||
Lease liabilities | (2,126 | ) | (2,530 | ) | ||||
Net cash used for operating activities | (37,640 | ) | (84,950 | ) | ||||
Investing activities | ||||||||
Acquisition of Tetraphase, net of cash, cash equivalents and restricted cash acquired | (33,513 | ) | - | |||||
Purchases of short-term investments | (2,999 | ) | - | |||||
Purchases of property and equipment | - | (698 | ) | |||||
Proceeds from the sale of property and equipment | 3,070 | - | ||||||
Proceeds from the sale of short-term investments | 2,497 | - | ||||||
Net cash used for investing activities | (30,945 | ) | (698 | ) | ||||
Financing activities | ||||||||
Net proceeds from issuance of common stock under 2013 Equity Plan | 605 | 31 | ||||||
Net proceeds from issuance of common stock under ESPP | 512 | 833 | ||||||
Net cash provided by financing activities | 1,117 | 864 | ||||||
Net decrease in cash, cash equivalents and restricted cash | (67,468 | ) | (84,784 | ) | ||||
Cash, cash equivalents and restricted cash, beginning of period | 88,729 | 173,513 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 21,261 | $ | 88,729 | ||||
Supplemental disclosure of non-cash investing and financing activities | ||||||||
Initial recognition of right-of-use lease asset | $ | 536 | $ | 16,798 | ||||
Conversion of Series F Convertible Preferred Stock into common stock | $ | - | $ | 2,737 | ||||
Cumulative-effect adjustment from adoption of ASU 2018-07 | $ | - | $ | (160 | ) | |||
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets | ||||||||
Cash and cash equivalents | $ | 21,221 | $ | 87,820 | ||||
Restricted cash | 40 | 909 | ||||||
Total cash, cash equivalents and restricted cash | $ | 21,261 | $ | 88,729 | ||||
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Contacts:
Chief Financial Officer
La Jolla Pharmaceutical Company
(858) 333-5769
mhearne@ljpc.com
